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Chesapeake Granite Wash Trust Message Board

  • rogere1946 rogere1946 Mar 25, 2014 5:12 PM Flag

    trading Chkr not like trading a regular stock

    One real problem I have and maybe I give it too much importance is that I HATE to trade MLP's. or Trust like chkr. Not a simple matter of buying and selling a stock and taking your loss or gain.

    Each trade gets a separate K1 at end of tax season. I use to do my own taxes but switched to a CPA last year. What a disaster that has proven to be for. Not only do I have to do all the same work I always did but
    they figured my taxes wrong and now I have to do an amended return. I failed to check their work until this year and bingo about 1200 bucks in my favor done wrong. I can imagine what about 3 or 4 K1 to chkr would do to their process if I traded this thing. The good news is (what little there is with chkr) that you do not pay taxes on all of the distribution so the rate of return is taxed at a lower level than ordinary income and can be lower than LT cap gains tax in some cases.

    Bottom line DO NOT do like I did and not check the work of your CPA because he has low paid people entering the amounts. Even then they didn't even enter my bond interest correct and also didn't figure my Foreign Tax credit correctly. I can use turbo tax or my old fashion way and spend the same amount of time doing taxes but I was hoping that by going to a CPA if something happened to me my wife could just drop off all the tax info and they would do it. Does not look like the CPA I choose is going to do that or not sure it will be done right. I think HR Block works better face to face with folks than a CPA lol.

    Glad to see us back in the 10 buck range. I doubt we will see 11 before x date but one can hope.

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    • rogere, I use Turbo Tax and even with it, entering multiple K-1's can be a bear. But it is essentially a data entry task, although this year Turbo Tax made some changes that complicated it. The posters on the investor village board for MLPs had some great suggestions for the workaround for sales and this year I was able to electronically file my return. I also understand the problems with trading MLPs, but note that you don't always get a K-1 if your trade is completed with the same month (or the K-1 may have a bunch of zeroes). But that's another reason to use options, especially if you are just trading the pre-distribution runup and the post ex-date these defective trusts like CHKR. The larger problem is that as CHKR's problems get more disclosure and more people figure out that the "yield" is really deceptive, you may not get yield-chasers pushing the stock up in order to take advantage of an overpriced stock. A PV-10 value of $6 still did not drive the stock price down much, so I guess there's still hope that the yield chasers drive it up to $11 or $12. For now, the better collapse play may be SDT as they near the end of their subordination period.

      • 1 Reply to marklibera
      • Mark I did my own taxes up too 2012 then gave them to a CPA. I just finished a meeting with him to show him 3 separate errors in my 2012 tax return which will cause an amended form to be filed.
        I have in the past used HR block program and all I can say is I got it done after several calls to the help center where I got someone who spoke English and between them and I got my issues resolved. I tried to use Turbo Tax as it seems to be the rage but I never could get past doing my interest entries as I have a CMO bond fund which deals with OID interest. Talk about a night mare that is one. It was one of the 3 places my CPA errored as well. The record keeping for the bonds have went from terrible (were I totally depended on my bond broker to do all the tax work for the OID for me and he did) to almost easy. I switched to a CPA because I wanted to get established and work through any area's of concern in case I am not around and my wife has to deal with all this #$%$.
        The results so far has not impressed me. I have an accounting degree and went into another field because of easy it is to screw up as an account lol. The K-1 I find easy to do and this year all I have to do is hand them over to the CPA and he will put the numbers in for me so that much is better.

        I do not think chkr will ever see 12 bucks again but I do think the next 3 quarters should yield around $1.80 in disbursments as subordinates I do not expect to kick in until maybe the last quarter.
        I am not exactly sure what the PV-10 value of 6 really means but if it means that the pay out of disbursement will be around that number that would call for drastic fall off in the well production.
        Fall off is expected in oil and ng wells but I doubt that the total amount of oil and NG in chkr trust is close to 6 bucks pay out to trustee's. The market tells me they do not believe it either.

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